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Route to the Netherlands

Route to the Netherlands

Route to

Business crime and regulation

THE NETHERLANDS The Netherlands has stable industrial relations, moderate unemployment and offers a strategic location within the heart of Europe. Industrial activity is predominantly in food processing, chemicals, petroleum refining, logistics and electrical machinery. The country’s openness to foreign investment as an international business environment is deeply ingrained in Dutch culture. This makes the Netherlands an ideal destination for international financiers. The Netherlands The Netherlands boasts the Port of Rotterdam, the largest seaport in Europe and the third largest in the world; Schiphol Airport, a major business hub in Europe; as well as efficient road, rail and inland waterway connections. Other merits include a strong technological infrastructure and a multilingual, flexible and highly educated workforce. Additionally, the competitive Netherlands tax climate has a number of features that may be very beneficial to a company’s international footprint. The Netherlands experienced more than 20 years of uninterrupted economic growth before the economic crisis took hold. In 2009 GDP contracted sharply and exports decreased by 25% due to faltering global demand. However, decisive government intervention and timely fiscal stimulus measures have enabled the Netherlands to come out of the crisis and retain their strong position in Europe. The new Dutch coalition government has been pushing through a deficit reduction programme valued at €18bn, designed to bring the Dutch public deficit down from 6% to 0.9 % of GDP by 2015. Recently, economic experts at ING Bank have rated the Netherlands as the country in the best financial shape in Europe to weather the storm. As Mrs Liesbeth Staps, executive director Netherlands Foreign Investment Agency (NFIA) UK & Ireland notes, “The Dutch economy is noted for its stable industrial relations and is characterised by the lowest unemployment numbers in the Euro zone, low inflation and a sizeable current account surplus. What’s more, the Netherlands has the lowest external debt as a percentage of its GDP. We see a continuous interest in the Netherlands as foreign direct investment flows remain steady.” Netherlands Foreign Investment Agency The biggest challenge for companies seeking to expand into a new territory is finding the right location and strategy to enable international business growth. Workforce, infrastructure and business climate are also important factors that must be considered. The NFIA can help foreign companies to overcome any challenges when looking to launch a business in the Netherlands. Mrs Staps commented: “We assist foreign companies with the expansion and development of their business as well as their employees to the Netherlands. We shorten the return on investment time and clarify the steps necessary to reach the companies’ objectives. Simply by directing foreign companies through the maze and thus letting them focus on what is most important: the development of their business.” NYSE Euronext Amsterdam The Amsterdam exchange, considered the oldest in the world, is now part of NYSE Euronext. NYSE Euronext is the international capital markets destination of choice for leading international companies, with the most powerful visibility platform of any global exchange group. It is the most liquid exchange group in the world, and number one in the world in proceeds raised via both IPOs and secondary offerings. The group has recently announced that it is in advanced discussions with regarding a merger with Deutsche Boerse which, if it goes ahead, it will make the market the centre of gravity for European issuers. NYSE Euronext also works with the Holland Financial Centre and other initiatives to attract foreign investments. A significant number of Blue Chip companies are listed on NYSE Euronext Amsterdam such as Royal Dutch Shell, Unilever, ArcelorMittal, Philips, ING Group, Heineken, KPN, Ahold, AkzoNobel and Randstad. The importance of Amsterdam as a listing venue was confirmed by the stock exchange’s impressive end of year results for 2010, which showed that total market capitalisation of the 151 NYSE Euronext Amsterdam-listed companies reached $767 billion. As of December 31st 2010, 7,034 structured products; 1,358 bonds, 182 investment funds and 101 ETF’s are listed on NYSE Euronext Amsterdam. Anne Louise van Lynden van Sandenburg, business development head commented:

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Mrs Liesbeth Staps Executive Director UK & Ireland Netherlands Foreign Investment Agency +44 207 225 1074 liesbeth@nfia.co.uk www.nfia.co.uk

Anne Louise van Lynden van Sandenburg Business Development Head NYSE Euronext +31 20 550 4107 alvanlynden@nyx.com www.nyse.com

“Over the last couple of years our listed companies have raised significant amounts of capital on our market, both in primary and in secondary share issues, and corporate bond issues. These proceeds were used to recapitalize at critical moments for the companies, as well as to finance acquisitions as the valuations made some assets extremely attractive. Investors also invested significant amounts of capital were in government and corporate bonds, allowing them to maintain the value of their investments even during considerable market upheaval. This shows that even under the most tumultuous circumstances, the stock exchange is able to provide a transparent, safe and well-regulated trading platform for investors and offering listed companies quick and efficient access to capital. This is especially pertinent in economically difficult times.” Equity options are extremely successful products which are traded on NYSE Liffe Amsterdam. The average daily volume of NYSE Liffe Amsterdam in 2010 was 482,000 contracts. NYSE Liffe’s ‘full screen’ central market model, which was pioneered in Amsterdam, gives investors access to competitive prices throughout the trading day by ensuring a constant display of bid and offer prices. This market model is now also used in Brussels, London and Paris. NYSE Liffe Amsterdam lists options and futures on the AEX-Index, (the Dutch Blue Chip index), options and futures on the Dollar-Euro currency pair and 47 Individual Equity options, as of 31st December 2010. NYSE Liffe Amsterdam also lists very successful weekly and daily options on the AEX-index. In 2010 the Average Daily volume of weekly options was 15K and the Average Daily volume of daily options was 24.1K. As from 16 July 2010, weekly options on single stocks are available for trading. In December investors can trade in six weekly options on single stocks.

Cees J. van Bavel Attorney at law Van Bavel Attorneys +31 (0)20 312 16 00 vanBavel@vanbaveladvocaten.nl www.vanbavelattorneys.com

Van Bavel Attorneys specialise in tax criminal law and economic criminal law. The firm regularly handles cases that involve the Fiscal Intelligence and Investigation Service (FIOD), the Netherlands Authority for the Financial Markets (AFM), the Dutch Central Bank (DNB) and the National Public Prosecutor’s Office for Financial and the Economic and Environmental Offences (Functioneel Parket). The firm’s attorneys have extensive knowledge of and experience in the areas of fraud (money laundering, corruption, embezzlement, misappropriation, forgery, insolvency fraud, tax fraud, market manipulation, insider trading, computer crime etc); economic crime pertaining to the Financial Supervision Act (WFT), environmental crime, betting and gaming, working conditions legislation etc; tax crime, including custom duty fraud and international criminal law (extradition or surrender of suspects, minor legal assistance, such as the seizure of documents, or the interviewing of witnesses at the request of foreign authorities). The firm also offer services to possible victims or aggrieved parties. They advise on the prevention of criminal acts (compliance), and are in a position to

help with internal fraud investigations while working with other specialists such as forensic accountants. Attorney at law Cees Van Bavel said that the firm’s forté is to prevent cases reaching the prosecution stage. “We will do our utmost to prevent prosecution, and work toward an out of court settlement, with as little publicity as possible. We are working on some very high profile cases at the moment, involving (international) bribery and tax fraud.” The firm regularly handles fraud cases with an international component, including countries with extremely strict banking (secrecy) laws such as Liechtenstein, Luxemburg and Switzerland. With the close cooperation of local counsel, they also deal with cases in Belgium, Spain and the UK Mr van Bavel said that the firm has noticed a significant increase in business crime related work recently; however this is not due to the economic downturn. He said this is more to do with the fact that the focus of the investigating and prosecuting authorities has shifted more on to combating financial crime and because more companies are selfreporting possible fraudulent activities than ever before. If a client unintentionally breaches regulatory rules and require legal representation, Mr van Bavel suggests that the company in question should contact and consult an experienced lawyer ASAP, as they will be the only advisor with legal privilege. “Beware that accountants and tax advisor are under a duty to report unusual transactions (which may nowadays even be at hand when the company possesses money which is not properly declared to the tax authorities). In addition, a lot of irreparable harm can be prevented if media and strategy issues are determined with the help of a lawyer as early as possible. Especially, if it is or will become a high profile fraud-case, it is very important to identify how and to which extent you will communicate with the media,” he added.

Due Diligence

Mazars is an international organisation specialising in audit, accounting, tax and advisory services. Their independent integrated partnership with global reach and local roots makes them unique. Mazars can rely on the skills of more than 12,500 professionals operating in 56 countries, sharing the same values and sense of responsibility. The Mazars advisory services comprises the following: Transaction services, Corporate Finance, Project Financing, Forensic & investigation services. In the Netherlands, the due diligence process has become ever more important. Jos Raben, director of Mazars Transactions Services, claimed that before the economic crisis due diligence was sometimes a part of the acquisition process that was neglected. “One simply wanted to do the deal or someone else was doing the deal. Risks were sometimes neglected.” These days, however, the due diligence procedure has become an important part of the process, in particular due diligence concerning projections, future cashflow and working capital have got more and more attention. In the aftermath of the downturn Mazars has not seen a significant decrease or increase in the total amount of due diligence work. Mr Raben did note that there has been a decrease in the size of deals, though this did not affect the number of transactions and therefore the amount of due diligence work remained the same. Due diligence is now a prominent part of the M&A process as this area has become more professional in recent years with more and more companies now recognising the value of a well executed due diligence procedure. Mazars can assist companies with both the acquisition and vendor due diligence. Mr Raben discussed some of the other relevant services that the firm provides: “We can offer a full service concept regarding the transaction from the initial search to the final closing and integration. Next to the traditional due diligence

Jos Raben Director Mazars Transaction Services +31-20-20 60 500 / 457 jos.raben@mazars.nl www.Mazars.nl

services like financial, tax and legal due diligence our services also encompass pension Due Diligence and IT-Due Diligence. We at Mazars are mainly involved in buy-side due diligence for national and international corporations and private equity houses. There are several issues that a potential acquirer must look out for before completing a transaction. Mr Raben said that a main point of concern is the final review of the assumed parameters (preliminary deal-sheet) of the transaction. After a due diligence has been performed, the outcome of the procedure needs to be confronted with the initial transaction rational and the final deal-sheet needs to be drawn up. “When the initial parameters are still valid or have not been adjusted downwards, one can proceed. However, if the outcome of the due diligence gives reasons for doubt, one should not be afraid to renegotiate the terms and conditions or for not closing the transaction. Often we analyse commercial and operational performance next to the standard financial, tax and legal due diligence, to get a better understanding on the commercial environment of the company and to get an overview of the internal strengths or weaknesses that need to be taken into consideration, post-transaction.” Quality of service and being objective are key factors that the professionals at Mazars focus on. The firm also recognises that many acquirers want senior professionals to work on a deal as their knowledge contributed massively to the success of a transaction. “Given our attractive hourly rates we can offer senior involvement throughout the entire transactions process,” commented Mr Raben. March 2011 Corporate INTL 117


Route to the Netherlands

Route to the Netherlands

Insolvency & Restructuring Roel Slotboom Partner and Head of Insolvency Team Schaap & Partners + 31 10 27 70 300 slotboom@schaap.eu www.schaap.eu

Schaap & Partners is a medium-sized firm in Rotterdam providing top-quality services for domestic and international companies. Approximately 40 lawyers, civil-law notaries and candidate civil-law notaries work together efficiently as a team, guaranteeing a wide knowledge development and representing their clients’ interests in the best possible way. Schaap & Partners’ main focus is on corporate and real estate. The firm has a good reputation, which is also projected to the clients and relations. Being independent, Schaap & Partners is associated with an international network of trusted law firms. Cross-border services are rendered under their direction. “In the Netherlands, the court declares a company in liquidation at the company’s request or at the request of one or more creditors,” explained firm partner and head of insolvency Roel Slotboom. “If the company files a winding-up petition itself, a resolution to that effect must have been adopted by the general meeting of shareholders. If a third party files a winding-up petition, it must prove that the company owes a debt to this third party, which debt is due, payable and outstanding.” In many cases, after a company has been liquidated it will be checked to see if a ‘restart’ is possible. The liquidator then tries to reach an agreement with a

M&A third party, at which the assets of the liquidated company will be sold and the activities (in restricted form or otherwise) will be continued by another entity. If a company is being restructured, the purpose thereof is usually to keep the company intact. In the Netherlands, restructuring usually means renegotiating existing agreements with suppliers or buyers. Since restructuring also usually involves a reduction of the number of employees, this process also involves going to court to have employment contracts set aside or regulations made with the employees. In the past, reorganising companies has often proved to be quite difficult. According to Mr Slotboom, this is mainly a result of the fact that existing agreements cannot easily be adjusted if the other party does not wish to cooperate. In particular, the adjustment of employment contracts (or the termination thereof) appears to be difficult. In the present economic climate, there is more understanding for the fact that reorganisation is sometimes necessary in order to survive. However, this does not mean that the reorganisation has surpassed the insolvency if the restructuring of a company in trouble is concerned. “If the restructuring of a loss-making company is considered, many benefits can be derived from a restructuring compared to a new start after insolvency. At a restructuring, the legal entity in which the business is operated remains intact. This often means that also relationships with suppliers and buyers are maintained. A restructuring also prevents the negative publicity that insolvency entails. Furthermore, a reorganisation has the advantage for financiers and shareholders that the assets of the company keep their value to some extent,” concluded Mr Slotboom. For further information please contact Roel Slotboom (slotboom@ schaap.eu), or Jos Pennings (pennings@schaap.eu), Michel T Schroots (schroots@schaap.eu) and Marianne van der Laak (vanderlaak @schaap.eu).

Intellectual Property Michiel Rijsdijk Attorney at Law and Partner Arnold + Siedsma + 031 (0)20 3331433 mrijsdijk@arnold-siedsma.com www.arnold-siedsma.com

IP legislation in the Netherlands is to a large extent similar to that of neighbouring jurisdictions as it originates from implemented EU- directives or is based directly on EU-regulations. There are also several Benelux treaties covering trademark and design regulations. Law firm Arnold + Siedsma has specialised in all matters concerning the legal protection of IP in the Netherlands for more than 90 years. They provide the full service of IP rights in one convenient place: from registration to enforcement, advice about trademark or patent portfolios; to advice on drafting agreements and actions in cross border legal matters. The firm houses specialised IP attorneys, patent attorneys and design- and trademark attorneys. Arnold + Siedsma’s professionals have knowledge of the most important innovative industries, from biotechnology and pharmacy to the packaging industry. As many of the partners and associates are active members of the key IP organisations, such as INTA, MARQUES, AIPPI and LES, Arnold + Siedsma is often closely involved in legislative developments. The specialists of Arnold + Siedsma have extensive experience with proceedings before the Dutch courts, European administrative and judicial bodies such as the European Patent Office, the Benelux and Community trade mark offices, WIPO and the European Court of Justice. Their lawyers are at ease with high profile cases, complex legal issues and tough litigation. The firm also edits an internationally renowned IP application manual which is used by professional IP practitioners worldwide. Michiel Rijsdijk, attorney at law at Arnold + Siedsma, mentioned that a major

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issue in the Netherlands’ IP industry is the importation of grey imports and counterfeit goods through customs. Most of these products enter the country via Rotterdam, the world’s biggest harbour and Schiphol airport. “Online piracy is another issue affecting IP protected products in the Netherlands,” added Mr Rijsdijk. “We have designed an effective tool to limit the import of counterfeit products and/or grey import as much as possible for our clients.” According to Mr Rijsdijk most companies are aware of safeguarding their IP portfolio. Nevertheless, a common mistake trademark owners make is to limit actions to evident infringement cases, by which they run the risk to decrease the distinctive character and value of their trademark. “It is also important that the trademark owner does not use its mark in a generic way. This will cause the mark to become invalid,” explained Mr Rijsdijk. “Trademark owners should keep evidence of the use of their mark through the years, which evidence they need when their mark is older than five years and they oppose the use or registration of a younger similar mark. In general, small and medium enterprises need to be more aware of the need to register trademarks and the possible consequences of not filing patents and designs. IP owners should not forget to manage their IP portfolio in a correct way by, amongst other methods, checking the status of their IP rights and their license agreements every year in order to be able to get the most out of it.”

Pieter van den Berg Partner Buren van Velzen Guelen +31 (0)70 318 42 00 P.vandenBerg@BvVG.nl www.bvvg.nl

The M&A market in the Netherlands has been picking up since the second half of 2010 with increased activity from Asian parties, China in particular, within the Rotterdam port, logistics, transport and energy. Further a number of awaited private equity deals have been completed in the last quarter of 2010. According to Pieter van den Berg of Buren van Velzen Guelen the future seems moderately positive, but he warned that uncertainty remains in the market. Investors are attracted to the Netherland’s favourable tax legislation (inter alia extensive network of tax treaties, participation exemption, advance agreements and rulings, expat tax breaks), excellent investment and business infrastructure (including highly skilled workforce and legal and financial infrastructure). “The Netherlands is positioned well to take advantage of a possible international economic upturn. Its relatively sound financial position in comparison with other countries, excellent location and the low euro exchange rate are favourable for Dutch export, which is performing very well. Further, foreign investors regard Dutch companies as well organized and in some cases undervalued. There are still great finds to be had.” added Mr Van den Berg. Buren van Velzen Guelen is an independent well established firm of lawyers, tax lawyers and civil-law notaries. The firm has a rich history, which dates back to 1898. They are to the point, goal-oriented, and highly dedicated to their clients’ interests. Their offices are located in The Hague, the governmental capital of the Netherlands, and seat of many international institutions and multinationals. They have an extensive international network of experts with whom we work on a regular basis. A Japan Desk and Russia/CIS Desk complement their services to international clients. The firm employs around 60 lawyers, tax lawyers and (candidate) civil-law notaries. This experienced and enthusiastic group of professionals successfully renders high-quality legal services to a national and international client base. Clients include multinationals (both listed and private) and medium-sized private companies, institutions and investment funds. Their focus is on complex cross border corporate transactions, restructurings and international tax planning. Buren Van Velzen Guelen is a highly specialized medium-sized internationally oriented corporate and tax boutique. With various recommendations, the firm’s reputation is outstanding. Buren Van Velzen Guelen recently was able to combine its outstanding legal quality with its fierce commercial and pragmatic approach in a number of cross border transactions and restructurings in a variety of sectors, taking advantage of their excellent international network.

Public-Private Partnership Projects Daphne Broerse Project finance partner Norton Rose LLP +31 0 20 46 29 377 daphne.broerse@nortonrose.com www.nortonrose.com Wouter Hertzberger Project finance partner Norton Rose LLP +31 0 20 462 9427 wouter.hertzberger@nortonrose.com www.nortonrose.com

PPP in the Netherlands has taken flight in the last 10 years.After a slow start in the Netherlands, where the UK dominated the development of the PPP market, the tables have turned. Whilst in the UK PPP programs have been halted, the Dutch cabinet has committed itself to initiate a large number of PPP projects in the Netherlands. The first project performed in the Netherlands by means of public private partnership was the road widening project N31. The project included not only the construction of additional lanes, an aqueduct and a bridge, but also the maintenance over a period of 20 years. The contract was concluded in 2003 and the maintenance phase is presently underway. Norton Rose LLP was involved as the legal counsel for the Waldwei consortium, assisting the consortium in the negotiations and drafting of the DBFM contract. Since 2003, PPP in the Netherlands has also turned to accommodation projects. Examples include the renovation of the Dutch Ministry of Finance, the Kromhout barracks and, more recently, the construction and 15 year operation of the offices of the Tax Authority in Doetinchem. One of the most recently completed projects in the Netherlands was the A15, a road widening project near Rotterdam on which Norton Rose LLP assisted as lenders’ legal counsel. Interestingly, PPP in the Netherlands is now broadening its reach from a national to a regional and local scale, with projects such as the light rail in Groningen on which the Province of Groningen and the Municipality of Groningen are the initiators. The Dutch appetite for PPP projects is also shownby the measures taken by the Dutch government to expedite decision making processes for these types of projects. The Dutch Crisis and Recovery Act is a prime example of how the Netherlands have dealt with the recession and have found that PPP can actually prompt economic growth. The Recovery Act aims to accelerate the realisation of infrastructure projects in order to stimulate the national economy, especially in the fields of sustainability, energy and innovation. The Act stipulates a less time-consuming and complicated administrative procedure for specific projects. As a result thereof, these projects are brought forward in time. This is not the only example on how the Dutch Government is incentivising the market for PPP. With the standardisation of the DBFM contract, the Dutch government is also taking important steps to professionalise the national PPP market. However, it has become apparent that although the standard can serve as a starting point, each project has its specific characteristics, which require detailed negotiations. One specific characteristic of the standardised contract is the use of lump-sum milestone payments, which enables consortia to obtain part of its financing needs on a short term basis. Finally, on the energy side, our project financing and energy team is currently involved on the largest wind farm project to date. In summary, The Dutch market is currently benefiting from a promising deal flow of project financings which is attracting interest from both Dutch and foreign parties.

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Route to the Netherlands